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KPMG has announced that it has reached a settlement on a £1.3bn lawsuit brought by the liquidators of construction firm Carillion.
Carillion collapsed in 2018 after racking up debts of just under £7bn, causing thousands of job losses and leading to government reviews into auditing practices.
The liquidators claimed that KPMG missed “red flags” while auditing Carillion which caused issues.
Britain’s Official Receiver, part of the Insolvency Service, alleged that negligent failures by KPMG to detect misstatements in the accounts of Carillion cost claimants’ extensive loss and damage.
The Financial Reporting Council is yet to announce the outcome of its investigation into KPMG’s audits of Carillion.
Jon Holt, CEO of KPMG in the UK said: “I am pleased that we have been able to resolve this claim. Carillion was an extreme and serious corporate failure, and it is important that we all learn the lessons from its collapse. The FRC’s ongoing investigation into our work as Carillion’s auditor is an important part of that process, and we will continue to cooperate fully with it.”
KPMG stated that the details of the agreement were confidential.
